Petoskey budget approved

As they went about the process of approving a 2008 city budget Monday, Petoskey City Council members signaled their intentions to keep property tax bills under reins next year.

Council members unanimously approved the $28.3 million budget which city staff proposed for 2008, a plan which includes a 4 percent increase in expenses over this year's budget.

Along with the budget, the council voted 4-1 to approve a preliminary property-tax proposal for 2008. Council members called for the city's general fund tax revenues - which support needs such as general government, public safety and parks and recreation - be held to no more than $3.55 million next year.

Final tax rates are set after the yearly equalization process is complete, typically in late spring.

Council member Joe Baird, who proposed the revenue limitation, noted that the dollar figure is equivalent to what this year's general fund tax levy of 7.49 mills would generate if applied to the city's projected taxable value for 2008. If property values rise more than anticipated, the revenue limitation could result in a general-fund millage rollback.

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The council decided to preliminarily keep three other tax levies at their 2007 levels. A levy for solid waste services stands at .49 mill, a right-of-way improvement levy at 3.86 mills and a library levy at 1.77 mills.

Mayor Dale Meyer had proposed that the council maintain its 2007 rates for these tax levies. He also suggested a preliminary increase in the general fund tax rate, to the 7.67 mill level which city staff had proposed, noting that he wanted to ensure current services and proposed project expenses could be met.

Before the council approved this hybrid idea, two other tax proposals had failed to receive the needed support Monday.

Baird first moved to set a limit of $6.46 million to be collected through all city tax levies next year, which would reflect the total 2007 tax levy of 13.61 mills applied to the city's taxable value of $537 million that's projected for 2008. But his motion didn't receive a second.

Council members Cynthia McWatters and Jeremy Wills then voted in favor of the 13.94 mill total tax levy which city staff had proposed for next year, but the other three council members rejected this.

Council member Bob Johnson, who cast the dissenting vote on the final tax proposal, said he hoped the council would have reached a decision which would have scaled back on next year's property tax bills.

Wills asked city manager George Korthauer whether city services would be affected by setting the tax rate lower than the staff had sought.

"I don't know if the operations would be affected so much as the (possible need) to defer projects," he said, adding that it's easier to move back a project than to cut back on services. "I think the residents are satisfied with the level of services, so we try to retain those."

The council also voted 4-1 to provide Korthauer with a $2,800 raise for 2008, which would bring his salary to about $96,000.

Baird, who proposed the raise, said it's equivalent to the 3 percent increase included for other non-union city employees as part of next year's budget.

Johnson cast the dissenting vote on the manager's raise. After the meeting, he said he opposed the increase because the time didn't seem right to raise expenses.

"It is not, and I repeat not, an opinion that he is not worth it," the council member said.

Calculate, understand the 2008 city tax plan

Petoskey's preliminary property-tax proposal for 2008 involves a revenue limit for one of the city's property tax levies and maintenance of current-year rates for the other three.

Plans call for general-fund tax revenues not to exceed $3.55 million. This is the amount that would be generated if the 2007 general tax rate of 7.49 mills were applied to the city's projected taxable value of $537 million for 2008. If property values rise more than predicted, a tax rollback could result.

The preliminary proposal calls for the solid waste levy to be held to .49 mill, the right-of-way millage to 3.86 mill and the library millage to 1.77 mill.

Rates won't be finalized until after the yearly equalization process is complete. The final decision typically occurs in late spring.

A mill is equivalent to $1 in taxes for each $1,000 of a property's taxable value. Taxable value is typically about half a property's market worth.

Petoskey City Council members voted unanimously Monday to confirm mayor Dale Meyer's proposed appointees for several governmental panels. These are as follows:

Downtown Management Board/Downtown Development Authority Board: Mike Teska reappointed for a four-year term and David Marvin newly appointed for a four-year term. Marvin replaces Stafford Smith, who decided to retire from the boards

Library Commission: Lori Pall reappointed for a five-year term

Airport board: City manager George Korthauer reappointed for a four-year term